* Portfolio occupancy at 97 percent
* Units up 1.75 percent (Adds details)
TORONTO, April 29 (Reuters) - RioCan Real Estate Investment Trust (REI_u.TO) topped market expectations with a 22 percent rise in first-quarter funds from operations, helped by a combination of higher rental revenue and property operating income, sending its units higher on Thursday.
Canada’s biggest real estate investment trust said funds from operations, a key measure of profitability for real estate companies, rose to C$86.4 million ($86.4 million), or 36 Canadian cents a unit, compared with C$70.6 million, or 32 Canadian cents a unit, a year earlier.
Analysts polled by Thomson Reuters I/B/E/S had on average expected FFO of 34 Canadian cents a unit.
The market-beating results helped lift RioCan units 1.75 percent to C$19.14, alongside a broad advance on the Toronto Stock Exchange.
RioCan said quarterly rental revenue rose C$18 million to C$200.8 million, with same property net operating income for the quarter up by 4.2 percent.
The REIT said its portfolio occupancy as of March 31 was 97 percent.
“We are making good progress towards our income targets and are looking forward to generating meaningful growth through acquisitions, the completion of some of our greenfield developments, and organic growth within the portfolio in the coming quarters,” Edward Sonshine, president and chief executive said in a statement.
Macquarie analyst Michael Smith said in a note that the CEO’s comment was “a clear and positive signal that RioCan is on track to meet its goals.”
RioCan, which made its first steps into the U.S. retail property market last year, said it had completed the acquisition of seven properties in Canada and the United States during the quarter.
The REIT, which owns more than 200 retail properties, said its ownership interests in 12 development projects will add about 3 million square feet of space.
In addition to these greenfield developments, RioCan said it was working with Wal-Mart Stores (WMT.N) on four locations to remodel or expand them into supercenters, which offer groceries along with the retailer’s general merchandise.
RioCan said it had cash on hand of about C$106 million at the quarter’s end. Last year, Sonshine said the REIT had earmarked about C$500 million towards acquisitions for 2010.
$1=$1.01 Canadian Reporting by Isheeta Sanghi in Bangalore and Ka Yan Ng in Toronto; editing by Rob Wilson